President Erdoğan Refuses to go Back to the IMF for Loans
Speculation has been rampant that the Turkish government would go to the International Monetary Fund for financial assistance amid an economic crisis in the country after Turkish voters go to the polls in local elections in March.
The Turkish economy has been facing troubles for a couple of years now but the fortunes began to take a turn for the worse after the coup attempt in 2016. In 2002 the Justice and Development Party rose to power in Turkey and immediately upon taking power Turkey implemented many pro-business and economic reforms meant to try to rescue Turkey from the economic collapse. The policies of the AKP worked very well for Turkey to start as economic growth surged, towns and cities boomed, millions of Turks saw massive improvements in their standard of living especially in the Anatolian heartland. However, within the building boom, Turkey did borrow a lot of money to help fund the building boom and as the debt rose and the Lira value collapsed that has spelled troubled times ahead for the Turkish economy. In addition to the debt and deficit problem, the Turkish government has seen an extremely large accounting deficit where they import far more than they export.
The Turkish government as it has turned away from the globalist institution the EU they have gotten ever more hostile to the IMF EU neoliberal agenda but they have realized the need to get the finances in order and set a goal for a gradual cutback in the deficit and they are betting on a number of factors to help bring Turkey out of the economic troubles it is in. Qatar invested 15 billion dollars into Turkey’s financial sector. In 2018 Turkey inaugurated the new Istanbul airport which is set to be one of the biggest and busiest in the world. The Istanbul Financial Center would centralize Turkish investment banking similar to how Wallstreet does in the US. On the Bosphorus Strait, a new canal is set to be finished in 2023 the 100 year anniversary of the founding of the Turkish Republic. The new High Speed Rail System will be the second longest in the world. The Istanbul-Izmir railway project will connect Eastern Istanbul and Izmir along the Aegean Sea. Russia and Azerbaijan are building major pipelines through Turkey that will transmit oil and gas to the European market. Azerbaijan’s state oil company SOCAR inaugurated a 6.3 billion dollar refinery in October 2018 that is set to reduce the massive trade deficit. Turkey has sought to increase its abilities in the Defense industry so it can increase production and sales to the international market. There are many smaller mega projects and investments that the Turkish government has been making that are high risk but can also be very high reward.
In Turkey, the situation is very unpredictable for the Lira and the Economy, and it is anyone’s guess what will play out in the future as the massive infrastructure projects mentioned above are very high-risk high-reward, it is unclear longterm what will happen with foreign investment in the country, as well as the future of a number of Turkey’s commercial relationships, but it is early to say that Turkey needs the globalist IMF to bail them out.